Daiwa Securities Group · The Daiwa Securities Group’s CSR Activities/Inquiries Third-party...
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What will the world be like when these 53 babies become adults? The precious faces of these infants—all children of Daiwa Securities Group employees— express our hopes for the future. At the Daiwa Securities Group, we are determined to take responsibility as individuals and to do our part as a company to create a sustainable society living in happiness and in harmony with an unspoiled Earth. What we can do Daiwa Securities Group Sustainability Report 2008 Daiwa Securities Group Building a Sustainable Society Sustainability Report
Transcript of Daiwa Securities Group · The Daiwa Securities Group’s CSR Activities/Inquiries Third-party...
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What will the world be like when these 53 babies become adults?
The precious faces of these infants—all children of Daiwa Securities Group employees—
express our hopes for the future. At the Daiwa Securities Group,
we are determined to take responsibility as individuals and to do our part as a company
to create a sustainable society living in happiness and in harmony with an unspoiled Earth.
W h a t w e c a n d o
Da
iwa
Se
cu
rities G
rou
p S
usta
ina
bility R
ep
ort 2
00
8
At the Daiwa Securities Group, our business is finance. As such, we do not immediately face the
environmental problems that some other industries do. Nevertheless, we use huge amounts of
paper to print various documents—including this one—as well as prospectuses, sheets and forms.
Becoming aware of our use of paper is a step toward protecting forests both in Japan and in
developing countries, and therefore we have printed this report on paper made from responsibly
thinned timber.
This report is printed on paper made from responsibly thinned timber.
Daiwa Securities Group
Daiwa Securities Group
Building a Sustainable Society
Sustainability Report
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Employee Composition Number of employees: 14,456
Sustainability Report 2008 is available in booklet and Web editions. See p. 54 of this booklet for more details concerning the Web edition.
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The Daiwa Securities Group has published this re-port yearly since 2002 with the aim of disclosing, clearly and in good faith, our activities to create a sustainable society. We also view the process of preparing this report as an important opportunity for us to af-firm the outcome of our efforts and single out issues requiring further attention.
The Daiwa Securities Group identifies four material issues related to corporate social responsibility (CSR) that are likely to have a major impact on stakehold-ers’ decision-making and on society. This report fo-cuses on describing our progress in dealing with those issues and also explains our management policy of building a company worth working for and our initia-tives for putting this policy into practice.
This report was compiled in accordance with the 2006 Sustainability Reporting Guidelines, internation-al guidelines published by the Global Reporting Initia-tive (GRI).∗ Two particular objectives in preparing this publication were to raise CSR awareness among executives and employees and promote dialogue with various stakeholders.
∗Global Reporting Initiative (GRI): An organization founded in 1997 to draw up and disseminate international guidelines for sustainability reporting. Participants include a variety of stakeholders, such as businesses, non-governmental organizations (NGOs), consultants, accounting groups and trade associations.
Scope of ReportIntended Readership
This report is intended for the Daiwa Securities Group’s diverse stakeholders, which primarily include customers, shareholders and investors, executives and employ-ees, as well as business partners, non-profits (NPOs, NGOs), local communities where Daiwa Securities has offices, educational institutions, and the families of executives and employees.
Scope of ReportingThis report basically covers our nine main group com-panies,∗ which account for approximately 90 percent of the Group’s employees. The report does not, how-ever, include data from all nine companies on all items reported; the information included is proportional to the respective companies’ size and type of business handled. Environmental load data changed due to head office relocation in fiscal 2007. The scope of numerical data is noted along with the data.
Period Covered by ReportFiscal 2007 (April 2007–March 2008). The report also includes some information on activities carried out in fiscal 2008 and on activities that occurred prior to fiscal 2006.
Publication DateAugust 2008 (the previous report was published in September 2007; the next report is planned for June 2009).
∗See “Description of the Daiwa Securities Group’s Business” on p. 4 for the Group’s nine main companies.
Table of ContentsEditorial Policy Daiwa Securities Group Sustainability Report 2008 Booklet and Web Edition
The Daiwa Securities Group
The Web edition of Sustainability Report 2008 can be found at the following URL:
http://www.daiwa-grp.jp/ir/english/corporate/report/
Corporate Profile (as of March 31, 2008)
Company nameDaiwa Securities Group Inc.
HeadquartersGranTokyo North Tower, 9-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-6751, Japan
Telephone+81-3-5555-1111
EstablishedDecember 27, 1943 (Founded 1902)
President and CEOShigeharu Suzuki
Common stock¥178.3 billion
Number of employees (consolidated)14,456
Number of consolidated subsidiaries46
Number of equity-method affiliates6
Shares issued and outstanding1,404,664,000
Principal Management Indicators (consolidated)
Number of Employees (Consolidated)∗
Breakdown of Operating Revenues(Consolidated)
Breakdown of Net Operating Revenues by Region(Consolidated)
∗ No. of employees includes Financial Advisors (FA).
0
3,000
6,000
9,000
12,000
FY2007
15,000(persons)
Fiscal year end
(¥ billion)
Daiwa Securities Co. Ltd.
49%
Daiwa SecuritiesSMBC Co. Ltd.
14%
Other groupcompanies inJapan 25%
Group companiesoutside Japan
10%
By company By region
Americas2%
Japan90%
As of March 31, 2008
Asia/Oceania4%
Daiwa Securities Group Inc. 2%
(¥ million) (¥ million)
Americas10,195
Total447,491
Japan406,519
Operatingrevenues
Net operatingrevenues
0
200
400
600
800
Commissions294,424
Net gain on trading103,361
Interest anddividend income
358,422
Service fees andother sales50,052
Net gain on private equityand other securities 19,160
1,000
FY2007 FY2007
Asia/Oceania17,327
Europe13,448
Operating Revenues andNet Operating Revenues (Consolidated)
12,459 12,243 12,561
FY2003 FY2004 FY2005
917
526
825
447453
352
519
390
845
579
Material Issues Report
FY2003
Operating revenues (¥ million)
Net operating revenues (¥ million)
Ordinary income (¥ million)
Net income (loss) (¥ million)
Net assets (¥ million)
Total assets (¥ million)
Return on equity (ROE) (%)
Net income (loss) per share (¥)
Net assets per share (¥)
Annual dividends per share (¥)
453,813
352,434
96,130
42,637
604,170
10,765,665
7.4
31.66
453.60
10.00
FY2004 FY2005 FY2006 FY2007
845,659
579,358
260,651
139,948
792,281
14,898,890
19.4
103.90
598.27
34.00
917,307
526,764
195,415
92,724
1,223,225
14,411,265
10.8
67.90
665.98
28.00
825,422
447,491
90,143
46,411
1,082,923
17,307,119
5.3
33.69
607.64
22.00
519,337
390,432
120,433
52,665
648,332
12,378,961
8.4
39.03
486.70
13.00
FY2006
FY2007FY2003 FY2004 FY2005 FY2006
13,26414,456
Europe5%
Table of Contents/Editorial Policy
The Daiwa Securities Group
Description of the Daiwa Securities Group’s Business
Message from the President
Daiwa Securities Group CSR and Material Issues
Material Issue 1: Adding a Social Perspective to Investment
Material Issue 2: Commitment to the Development of a Sound Securities Market
Material Issue 3: Contribution to Global Environment
Material Issue 4: Communicating Information fora Sustainable Society
CSR Issues: Performance and Targets
Corporate Governance
CSR Management
Compliance
Information Disclosure
Customer Satisfaction
Respect for People and Human Resource Utilization
Corporate Citizenship
Environmental Impact of the Daiwa Securities Group
Distribution of Economic Value to Stakeholders
Third-party Opinions
The Daiwa Securities Group’s CSR Activities/Inquiries
Third-party Evaluations/Daiwa Securities GroupSustainability Report 2008 Booklet and Web Edition
Social Report
Environmental Report
Management Report
Economic Report
1 2DAIWA SUSTAINABIL ITY REPORT 2008
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Employee Composition Number of employees: 14,456
Sustainability Report 2008 is available in booklet and Web editions. See p. 54 of this booklet for more details concerning the Web edition.
1
2
3
5
7
11
17
19
21
25
27
29
31
33
35
37
43
47
49
51
53
54
The Daiwa Securities Group has published this re-port yearly since 2002 with the aim of disclosing, clearly and in good faith, our activities to create a sustainable society. We also view the process of preparing this report as an important opportunity for us to af-firm the outcome of our efforts and single out issues requiring further attention.
The Daiwa Securities Group identifies four material issues related to corporate social responsibility (CSR) that are likely to have a major impact on stakehold-ers’ decision-making and on society. This report fo-cuses on describing our progress in dealing with those issues and also explains our management policy of building a company worth working for and our initia-tives for putting this policy into practice.
This report was compiled in accordance with the 2006 Sustainability Reporting Guidelines, internation-al guidelines published by the Global Reporting Initia-tive (GRI).∗ Two particular objectives in preparing this publication were to raise CSR awareness among executives and employees and promote dialogue with various stakeholders.
∗Global Reporting Initiative (GRI): An organization founded in 1997 to draw up and disseminate international guidelines for sustainability reporting. Participants include a variety of stakeholders, such as businesses, non-governmental organizations (NGOs), consultants, accounting groups and trade associations.
Scope of ReportIntended Readership
This report is intended for the Daiwa Securities Group’s diverse stakeholders, which primarily include customers, shareholders and investors, executives and employ-ees, as well as business partners, non-profits (NPOs, NGOs), local communities where Daiwa Securities has offices, educational institutions, and the families of executives and employees.
Scope of ReportingThis report basically covers our nine main group com-panies,∗ which account for approximately 90 percent of the Group’s employees. The report does not, how-ever, include data from all nine companies on all items reported; the information included is proportional to the respective companies’ size and type of business handled. Environmental load data changed due to head office relocation in fiscal 2007. The scope of numerical data is noted along with the data.
Period Covered by ReportFiscal 2007 (April 2007–March 2008). The report also includes some information on activities carried out in fiscal 2008 and on activities that occurred prior to fiscal 2006.
Publication DateAugust 2008 (the previous report was published in September 2007; the next report is planned for June 2009).
∗See “Description of the Daiwa Securities Group’s Business” on p. 4 for the Group’s nine main companies.
Table of ContentsEditorial Policy Daiwa Securities Group Sustainability Report 2008 Booklet and Web Edition
The Daiwa Securities Group
The Web edition of Sustainability Report 2008 can be found at the following URL:
http://www.daiwa-grp.jp/ir/english/corporate/report/
Corporate Profile (as of March 31, 2008)
Company nameDaiwa Securities Group Inc.
HeadquartersGranTokyo North Tower, 9-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-6751, Japan
Telephone+81-3-5555-1111
EstablishedDecember 27, 1943 (Founded 1902)
President and CEOShigeharu Suzuki
Common stock¥178.3 billion
Number of employees (consolidated)14,456
Number of consolidated subsidiaries46
Number of equity-method affiliates6
Shares issued and outstanding1,404,664,000
Principal Management Indicators (consolidated)
Number of Employees (Consolidated)∗
Breakdown of Operating Revenues(Consolidated)
Breakdown of Net Operating Revenues by Region(Consolidated)
∗ No. of employees includes Financial Advisors (FA).
0
3,000
6,000
9,000
12,000
FY2007
15,000(persons)
Fiscal year end
(¥ billion)
Daiwa Securities Co. Ltd.
49%
Daiwa SecuritiesSMBC Co. Ltd.
14%
Other groupcompanies inJapan 25%
Group companiesoutside Japan
10%
By company By region
Americas2%
Japan90%
As of March 31, 2008
Asia/Oceania4%
Daiwa Securities Group Inc. 2%
(¥ million) (¥ million)
Americas10,195
Total447,491
Japan406,519
Operatingrevenues
Net operatingrevenues
0
200
400
600
800
Commissions294,424
Net gain on trading103,361
Interest anddividend income
358,422
Service fees andother sales50,052
Net gain on private equityand other securities 19,160
1,000
FY2007 FY2007
Asia/Oceania17,327
Europe13,448
Operating Revenues andNet Operating Revenues (Consolidated)
12,459 12,243 12,561
FY2003 FY2004 FY2005
917
526
825
447453
352
519
390
845
579
Material Issues Report
FY2003
Operating revenues (¥ million)
Net operating revenues (¥ million)
Ordinary income (¥ million)
Net income (loss) (¥ million)
Net assets (¥ million)
Total assets (¥ million)
Return on equity (ROE) (%)
Net income (loss) per share (¥)
Net assets per share (¥)
Annual dividends per share (¥)
453,813
352,434
96,130
42,637
604,170
10,765,665
7.4
31.66
453.60
10.00
FY2004 FY2005 FY2006 FY2007
845,659
579,358
260,651
139,948
792,281
14,898,890
19.4
103.90
598.27
34.00
917,307
526,764
195,415
92,724
1,223,225
14,411,265
10.8
67.90
665.98
28.00
825,422
447,491
90,143
46,411
1,082,923
17,307,119
5.3
33.69
607.64
22.00
519,337
390,432
120,433
52,665
648,332
12,378,961
8.4
39.03
486.70
13.00
FY2006
FY2007FY2003 FY2004 FY2005 FY2006
13,26414,456
Europe5%
Table of Contents/Editorial Policy
The Daiwa Securities Group
Description of the Daiwa Securities Group’s Business
Message from the President
Daiwa Securities Group CSR and Material Issues
Material Issue 1: Adding a Social Perspective to Investment
Material Issue 2: Commitment to the Development of a Sound Securities Market
Material Issue 3: Contribution to Global Environment
Material Issue 4: Communicating Information fora Sustainable Society
CSR Issues: Performance and Targets
Corporate Governance
CSR Management
Compliance
Information Disclosure
Customer Satisfaction
Respect for People and Human Resource Utilization
Corporate Citizenship
Environmental Impact of the Daiwa Securities Group
Distribution of Economic Value to Stakeholders
Third-party Opinions
The Daiwa Securities Group’s CSR Activities/Inquiries
Third-party Evaluations/Daiwa Securities GroupSustainability Report 2008 Booklet and Web Edition
Social Report
Environmental Report
Management Report
Economic Report
1 2DAIWA SUSTAINABIL ITY REPORT 2008
-
3 4DAIWA SUSTAINABIL ITY REPORT 2008
Description of the Daiwa Securities Group’s Business
The securities business, which forms the core of the Daiwa Securities Group, plays a social role in bringing together parties seeking to finance corporate capital investment or public projects and investors wishing to invest efficiently.
With regard to corporate and public finance, securities companies help to raise funds for corporate capital invest-ment or R&D or for public projects by governments, interna-tional organizations or public bodies by providing advisory services, or by assisting them to issue stocks, bonds or fi-nancial instruments.
In the area of asset management, securities companies provide appropriate investment information or advice in ac-
cordance with customers’ investment goals and offer a full range of financial products and services to meet the needs of individual or institutional investors, pension funds and oth-ers with investment requirements.
In this way, the securities business, connecting capital demand and supply mainly through the finance and capital markets, creates a smooth flow of capital. By stimulating the flow of capital, our business contributes to the growth of in-dustry and helps address issues confronting society.
The Daiwa Securities Group is composed of Daiwa Securi-ties Group Inc., the holding company controlling the group companies, and two securities companies, Daiwa Securities Co. Ltd. and Daiwa Securities SMBC Co. Ltd., along with various companies providing securities-related services to offer a comprehensive range of investment and financial ser-vices.
Group Core Operations1. Retail Securities BusinessThrough its domestic network of 117 branches, a call center and the Internet, Daiwa Securities Co. Ltd. offers two retail services, Daiwa Consulting and Daiwa Direct, which provide a wide range of financial products and services and support customer asset management, mainly for individuals and un-listed companies. 2. Wholesale Securities BusinessDaiwa Securities SMBC Co. Ltd. provides fund management and investment banking services to institutional investors, corporate clients and financial institutions in and outside of Japan.
Asset management services: brokerage and trading of equities, bonds, derivatives and other financial products mainly for institutional investors.
Investment banking services: support for corporate oper-
ations ranging from business expansion to finance and capi-tal strategies by assisting corporate clients and financial in-stitutions to raise capital, issue bonds and manage assets. 3. Asset Management BusinessThe Group provides development and management of stock, bond and private investment trusts, as well as other investment management services. 4. Investment BusinessUsing its own funds, the Daiwa Securities Group invests in private equity, monetary receivables, real estate, venture capital opportunities, and business regeneration. It also forms and manages investment funds.
Group Support Operations5. Research and Systems BusinessThe Group engages in various forms of consulting and re-search reporting in fields such as management, finance, and information technology, for institutional investors, corporate clients, financial institutions, and public organizations in and outside Japan.6. Support ServicesServices are supplied in areas such as administrative out-sourcing relating to securities, as well as consulting for branch management, real estate and building management.
The Role of the Securities Business
Individualinvestors
Corporations/issuers
Institutionalinvestors
Assetmanagers
Others
Insurancecompanies
Trust banks
Daiwa Securities Group Inc.
Securities issuanceand underwritingBrokerage and trading
TradingTrading
Wholesalesecuritiesbusiness
Holdingcompany
Daiwa Property Co., Ltd.
DaiwaSecurities
Business Cen-ter Co., Ltd.
Daiwa Securi-ties SMBC Principal
Investments Co. Ltd.
DaiwaSecuritiesCo. Ltd.
Daiwa SecuritiesSMBC Co. Ltd.
Mainlyretail securities
business
Securitiesmarket
Asset managementneeds
Finance needs
Capitalinvestment
R&DM&A, etc.
Publicprojects,
etc.
Finance
EquitiesBonds
Securitizedproducts
Issuance
Funds
Returns
Investments
Corporations
Central and localgovernments,internationalbodies, etc.
Public corporations
Issuers
Securitiescompanies
∗1 Effective October 1, 2008, NIF SMBC Ventures Co., Ltd. will change its name to Daiwa SMBC Capital Co., Ltd.∗2 Effective October 1, 2008, Daiwa Institute of Research Ltd. will divide into two companies, Daiwa Institute of Research Ltd. and Daiwa Institute of Research Business Innovation Ltd.
Researchand systemsconsulting
Administrativeoutsourcing for
securities
Branchmanagement,
etc.InvestmentAssetmanagement
Investment
EquitiesBonds
Investmenttrusts
DerivativesSecuritizedproducts
Individualinvestors
Institutionalinvestors
Investors
DaiwaInstitute of Research
Ltd.∗2
NIFSMBC
Ventures Co., Ltd.∗1
DaiwaSB
Investments Ltd.
DaiwaAsset
Management Co. Ltd.
Investment
Description of the Daiwa Securities Group’s Business
-
3 4DAIWA SUSTAINABIL ITY REPORT 2008
Description of the Daiwa Securities Group’s Business
The securities business, which forms the core of the Daiwa Securities Group, plays a social role in bringing together parties seeking to finance corporate capital investment or public projects and investors wishing to invest efficiently.
With regard to corporate and public finance, securities companies help to raise funds for corporate capital invest-ment or R&D or for public projects by governments, interna-tional organizations or public bodies by providing advisory services, or by assisting them to issue stocks, bonds or fi-nancial instruments.
In the area of asset management, securities companies provide appropriate investment information or advice in ac-
cordance with customers’ investment goals and offer a full range of financial products and services to meet the needs of individual or institutional investors, pension funds and oth-ers with investment requirements.
In this way, the securities business, connecting capital demand and supply mainly through the finance and capital markets, creates a smooth flow of capital. By stimulating the flow of capital, our business contributes to the growth of in-dustry and helps address issues confronting society.
The Daiwa Securities Group is composed of Daiwa Securi-ties Group Inc., the holding company controlling the group companies, and two securities companies, Daiwa Securities Co. Ltd. and Daiwa Securities SMBC Co. Ltd., along with various companies providing securities-related services to offer a comprehensive range of investment and financial ser-vices.
Group Core Operations1. Retail Securities BusinessThrough its domestic network of 117 branches, a call center and the Internet, Daiwa Securities Co. Ltd. offers two retail services, Daiwa Consulting and Daiwa Direct, which provide a wide range of financial products and services and support customer asset management, mainly for individuals and un-listed companies. 2. Wholesale Securities BusinessDaiwa Securities SMBC Co. Ltd. provides fund management and investment banking services to institutional investors, corporate clients and financial institutions in and outside of Japan.
Asset management services: brokerage and trading of equities, bonds, derivatives and other financial products mainly for institutional investors.
Investment banking services: support for corporate oper-
ations ranging from business expansion to finance and capi-tal strategies by assisting corporate clients and financial in-stitutions to raise capital, issue bonds and manage assets. 3. Asset Management BusinessThe Group provides development and management of stock, bond and private investment trusts, as well as other investment management services. 4. Investment BusinessUsing its own funds, the Daiwa Securities Group invests in private equity, monetary receivables, real estate, venture capital opportunities, and business regeneration. It also forms and manages investment funds.
Group Support Operations5. Research and Systems BusinessThe Group engages in various forms of consulting and re-search reporting in fields such as management, finance, and information technology, for institutional investors, corporate clients, financial institutions, and public organizations in and outside Japan.6. Support ServicesServices are supplied in areas such as administrative out-sourcing relating to securities, as well as consulting for branch management, real estate and building management.
The Role of the Securities Business
Individualinvestors
Corporations/issuers
Institutionalinvestors
Assetmanagers
Others
Insurancecompanies
Trust banks
Daiwa Securities Group Inc.
Securities issuanceand underwritingBrokerage and trading
TradingTrading
Wholesalesecuritiesbusiness
Holdingcompany
Daiwa Property Co., Ltd.
DaiwaSecurities
Business Cen-ter Co., Ltd.
Daiwa Securi-ties SMBC Principal
Investments Co. Ltd.
DaiwaSecuritiesCo. Ltd.
Daiwa SecuritiesSMBC Co. Ltd.
Mainlyretail securities
business
Securitiesmarket
Asset managementneeds
Finance needs
Capitalinvestment
R&DM&A, etc.
Publicprojects,
etc.
Finance
EquitiesBonds
Securitizedproducts
Issuance
Funds
Returns
Investments
Corporations
Central and localgovernments,internationalbodies, etc.
Public corporations
Issuers
Securitiescompanies
∗1 Effective October 1, 2008, NIF SMBC Ventures Co., Ltd. will change its name to Daiwa SMBC Capital Co., Ltd.∗2 Effective October 1, 2008, Daiwa Institute of Research Ltd. will divide into two companies, Daiwa Institute of Research Ltd. and Daiwa Institute of Research Business Innovation Ltd.
Researchand systemsconsulting
Administrativeoutsourcing for
securities
Branchmanagement,
etc.InvestmentAssetmanagement
Investment
EquitiesBonds
Investmenttrusts
DerivativesSecuritizedproducts
Individualinvestors
Institutionalinvestors
Investors
DaiwaInstitute of Research
Ltd.∗2
NIFSMBC
Ventures Co., Ltd.∗1
DaiwaSB
Investments Ltd.
DaiwaAsset
Management Co. Ltd.
Investment
Description of the Daiwa Securities Group’s Business
-
Corporations are public entities that exist because they have a social purpose. Those that do not serve society will not survive. I want our executives and employees to al-ways be conscious of the important role that the Daiwa Securities Group plays in supporting the foundations of the economy, and at the same time I continue giving them the message that because of this they are performing work that truly benefits society. I can also say with confidence that out of all Japanese securities firms, Daiwa is the most committed to SRI funds.
From that viewpoint, vaccine bonds∗2 are clear and simple, as they can help save the lives of tens of thou-sands of children, and everyone at Daiwa can certainly feel that they are making a difference and helping society through such products.
Today, it is common for companies bring up environ-mental or social issues. But Daiwa is different because of our level of commitment, and I believe that the sentiment
of all executives and employees is the most important rea-son for this. I know that if everyone understands that the company’s management is committed, projects helpful to society will evolve naturally from that stance. To me, the Daiwa Securities Group is an organization with the neces-sary flexibil ity to accomplish this.
Corporate growth depends on investors putting up capital even if risk is entailed. In other words, companies cannot expand operations without risk money. Given that this is how the economy grows, this highlights the importance of the role played by securities companies as an intermediary between risk money and corporations. Therefore, employ-ees who truly understand this and take pride in their work are unlikely to resort to unethical practices. As head of the Daiwa Securities Group, I pay close attention to creating a system to prevent ethical lapses by the organization and to spread this awareness to management executives and em-
ployees through training and other means. Profits and losses are inherent to the nature of the se-
curities business, and it’s natural for clients taking losses to want to complain. But sales staff can remain unruffled if they are confident that they have done their best. Clients will not trust our staff if they feel they are just chasing fees, and neither can staff feel pride in their work.
We must work in a principled manner that is a level above simply observing the law and maintaining compli-ance. Even if what we do is fully within the law, we must operate in a socially acceptable manner, and it is important for everyone to perform their work with this awareness.
It is our responsibility to pass on a clean, green earth to our children and grandchildren.
Japan is resource-poor but is fortunate to possess many excellent environmental technologies. At Daiwa, we want to support implementation of these technologies by acting as a bridge between companies both in Japan and overseas.
Since April 2008, the Daiwa Securities Group has been selling the Russell Global Environmental Technology Fund, part of which is managed by Generation Investment Man-agement LLP, a company established by former U.S. vice president Al Gore. Generation had initially intended not to accept further subscriptions to this fund, but after we de-scribed our success with vaccine bonds, Generation chose us as its sales partner. This, I believe, is an example of how our commitment to social issues can be useful in various ways.
Emissions trading is a difficult issue in some respects, given the differing positions of governments and enterpri-ses, but we need to approach this concept with imagina-tion and creativity to help conserve the global environment.
To communicate the knowledge and expertise acquired through the securities business to the public, Daiwa is en-gaged in business-academia collaboration, for example dispatching management executives to lecture at universi-ties and other activities, and is also active in economic and financial education.
We also broadcast through Daiwa Securities Informa-tion TV, with a lineup that includes programs on securities for beginners, to communicate information on economics and finance. And while we believe that schools should be doing more to teach children about how economics and fi-
nance work, the first step is to interest their teachers. To that end, we are planning to work in partnership with a non-profit organization to develop an economics and fi-nance education program targeting school teachers.
Employees can work most productively if they enjoy fulfi l-l ing lives both at work and at home. Many people of my generation gave their l ives over to their companies, but I do not expect executives and employees of the Daiwa Se-curities Group to do the same. Life is not a success if a person had a bril l iant work career but neglected family in order to succeed in business. From now on, it is workpla-ces where employees can have satisfying private and pro-fessional lives that will attract talent.
I believe that employees will only be motivated or be proud of their company and their work if they can feel that they have something worth living and working for. I sincere-ly hope that everyone will approach life at home and at work with zest and vitality.
5 6DAIWA SUSTAINABIL ITY REPORT 2008
Encouraging Commitment Is the Key
Shigeharu SuzukiPresident and CEODaiwa Securities Group Inc.
∗1 The Daiwa Secur i t ies Group’s Four CSR-related Mater ia l Issues: “Adding a Socia l Perspect ive to Investment,” “Commitment to the Development of a Sound Securit ies Market,” “Contribution to Global Environment,” and “Communicat ing Informat ion for a Susta inable Society.” (See p. 10)
∗2 Vaccine bonds: Bonds that provide funds for heal th care and inoculat ion programs in developing countr ies. (See p. 12)
President and CEO Shigeharu Suzuki discussed the four CSR-related material issues∗1 identified by the Daiwa Securities Group.
Message from the President
�Selling Socially Conscious Investment Products Motivates Employees
�Pride in One’s Work Helps Build a Sound Securities Market
�A Clean, Green Earth forthe Next Generation
�Multi-channel Communication on Economics and Finance
�The Importance of Work-life Balance
-
Corporations are public entities that exist because they have a social purpose. Those that do not serve society will not survive. I want our executives and employees to al-ways be conscious of the important role that the Daiwa Securities Group plays in supporting the foundations of the economy, and at the same time I continue giving them the message that because of this they are performing work that truly benefits society. I can also say with confidence that out of all Japanese securities firms, Daiwa is the most committed to SRI funds.
From that viewpoint, vaccine bonds∗2 are clear and simple, as they can help save the lives of tens of thou-sands of children, and everyone at Daiwa can certainly feel that they are making a difference and helping society through such products.
Today, it is common for companies bring up environ-mental or social issues. But Daiwa is different because of our level of commitment, and I believe that the sentiment
of all executives and employees is the most important rea-son for this. I know that if everyone understands that the company’s management is committed, projects helpful to society will evolve naturally from that stance. To me, the Daiwa Securities Group is an organization with the neces-sary flexibil ity to accomplish this.
Corporate growth depends on investors putting up capital even if risk is entailed. In other words, companies cannot expand operations without risk money. Given that this is how the economy grows, this highlights the importance of the role played by securities companies as an intermediary between risk money and corporations. Therefore, employ-ees who truly understand this and take pride in their work are unlikely to resort to unethical practices. As head of the Daiwa Securities Group, I pay close attention to creating a system to prevent ethical lapses by the organization and to spread this awareness to management executives and em-
ployees through training and other means. Profits and losses are inherent to the nature of the se-
curities business, and it’s natural for clients taking losses to want to complain. But sales staff can remain unruffled if they are confident that they have done their best. Clients will not trust our staff if they feel they are just chasing fees, and neither can staff feel pride in their work.
We must work in a principled manner that is a level above simply observing the law and maintaining compli-ance. Even if what we do is fully within the law, we must operate in a socially acceptable manner, and it is important for everyone to perform their work with this awareness.
It is our responsibility to pass on a clean, green earth to our children and grandchildren.
Japan is resource-poor but is fortunate to possess many excellent environmental technologies. At Daiwa, we want to support implementation of these technologies by acting as a bridge between companies both in Japan and overseas.
Since April 2008, the Daiwa Securities Group has been selling the Russell Global Environmental Technology Fund, part of which is managed by Generation Investment Man-agement LLP, a company established by former U.S. vice president Al Gore. Generation had initially intended not to accept further subscriptions to this fund, but after we de-scribed our success with vaccine bonds, Generation chose us as its sales partner. This, I believe, is an example of how our commitment to social issues can be useful in various ways.
Emissions trading is a difficult issue in some respects, given the differing positions of governments and enterpri-ses, but we need to approach this concept with imagina-tion and creativity to help conserve the global environment.
To communicate the knowledge and expertise acquired through the securities business to the public, Daiwa is en-gaged in business-academia collaboration, for example dispatching management executives to lecture at universi-ties and other activities, and is also active in economic and financial education.
We also broadcast through Daiwa Securities Informa-tion TV, with a lineup that includes programs on securities for beginners, to communicate information on economics and finance. And while we believe that schools should be doing more to teach children about how economics and fi-
nance work, the first step is to interest their teachers. To that end, we are planning to work in partnership with a non-profit organization to develop an economics and fi-nance education program targeting school teachers.
Employees can work most productively if they enjoy fulfi l-l ing lives both at work and at home. Many people of my generation gave their l ives over to their companies, but I do not expect executives and employees of the Daiwa Se-curities Group to do the same. Life is not a success if a person had a bril l iant work career but neglected family in order to succeed in business. From now on, it is workpla-ces where employees can have satisfying private and pro-fessional lives that will attract talent.
I believe that employees will only be motivated or be proud of their company and their work if they can feel that they have something worth living and working for. I sincere-ly hope that everyone will approach life at home and at work with zest and vitality.
5 6DAIWA SUSTAINABIL ITY REPORT 2008
Encouraging Commitment Is the Key
Shigeharu SuzukiPresident and CEODaiwa Securities Group Inc.
∗1 The Daiwa Secur i t ies Group’s Four CSR-related Mater ia l Issues: “Adding a Socia l Perspect ive to Investment,” “Commitment to the Development of a Sound Securit ies Market,” “Contribution to Global Environment,” and “Communicat ing Informat ion for a Susta inable Society.” (See p. 10)
∗2 Vaccine bonds: Bonds that provide funds for heal th care and inoculat ion programs in developing countr ies. (See p. 12)
President and CEO Shigeharu Suzuki discussed the four CSR-related material issues∗1 identified by the Daiwa Securities Group.
Message from the President
�Selling Socially Conscious Investment Products Motivates Employees
�Pride in One’s Work Helps Build a Sound Securities Market
�A Clean, Green Earth forthe Next Generation
�Multi-channel Communication on Economics and Finance
�The Importance of Work-life Balance
-
The Daiwa Securities Group and Sustainability
Modern society faces many issues having an impact on sus-
tainability. These include, on a global scale, global warming
and other environmental problems that threaten humankind’s
survival, growing disparities in prosperity, and in Japan, a
rapidly aging population and a declining birthrate. There is
no way to solve these problems without responsible action
on the part of every sector of society—government, the pri-
vate sector, and citizens.
Enterprises are key players because they have the pow-
er to influence the creation of a sustainable society, and fi-
nancial institutions can fulfill their social missions through
their main business of finance. At the Daiwa Securities Group,
we believe that in addition to contributing to the develop-
ment and growth of fair and sound financial markets, our
role is to promote the flow of capital to create a sustainable
society by incorporating a social perspective into finance.
In accordance with this belief, we have joined the United
Nations Environment Programme Finance Initiative (UNEP FI)∗1
and signed the Principles for Responsible Investment (PRI)∗2
and the Carbon Disclosure Project (CDP),∗3 to do our part
as a member of the international community.
7 8DAIWA SUSTAINABIL ITY REPORT 2008
Approaches for Creating a Sustainable Society1. Serving society through our businessSecurities companies provide a public benefit by acting as intermediaries between parties needing financing and investors looking to invest, thus supporting Japan’s transition from a savings-oriented society to one more attuned to investing.
The Daiwa Securities Group carries out its operations in full legal compliance and meets social expectations in day-to-day operations to ensure the sound functioning of the se-curities market. 2. Implementing a business strategy that takes society
and the environment into accountBy incorporating a social perspective into finance, the Group strives to practice the corporate social responsibility expec-ted of a financial institution. We do this through SRI funds, World CO2L bonds∗1 and vaccine bonds,∗2 which give ordi-nary investors an opportunity to participate in tackling social and environmental issues through investing. 3. Promoting CSR outside the companyThrough the UNEP FI, PRI and CDP, the Group lends sup-port to various stakeholders, including the financial industry, to encourage CSR activities.
4. Carrying out corporate citizenshipThe Group is active in nurturing the next generation of eco-nomics and finance professionals, encouraging education in these fields as part of our Medium-term Management Plan. We will also continue providing long-term support for local communities and international society through financial mechanisms relating to our core business via the grant ac-tivities of foundations and NPOs/NGOs. 5. Managing CSRThe Group will continue doing business with awareness of its social and environmental impact. Along with instituting stronger corporate governance, achieving full compliance, attaining consumer satisfaction, and improving the workplace environment, we will strive to build an environmental man-agement system and raise environmental awareness among employees. We are currently endeavoring to reduce the use of paper, a major environmental load generated by our busi-ness.
∗1 United Nations Environment Programme Finance Initiative (UNEP FI)
∗2 Principles for Responsible Investment (PRI)∗3 Carbon Disclosure Project (CDP)
∗1 World CO2L (Cool) Bonds: See p. 14 for more details.∗2 Vaccine bonds: See p. 12 for more details.
TermsWeb
Customer trustWe stand on the trust of our customers. Prudently putting customer interests first and achieving a high standard of professional competence, we intend to become Japan’s premier securities group at home and abroad.
Total complianceWe can be proud and prosper only when we achieve total compliance and gain the trust of our customers, markets and the whole of society. We will contribute to society by maintaining high standards of professional ethics and a fair code of conduct.
Human resourcesOur competence is built on our human resources. We value the creativity of each individual, we will nurture a corporate culture where people are not afraid of challenges, and we will evaluate their capabilities and contributions fairly.
Sound profitOur fundamental objective is to enhance shareholder value through sound business operations. We will offer valuable services to our customers and earn appropriate profits for distribution to our shareholders.
Daiwa Securities Group: Approaches for Creating a Sustainable Society
1. Serving society through our business
2. Implementing a business strategy that takes society and the environment into account
3. Promoting CSR outside the company
4. Carrying out corporate citizenship
CSR activities (measures)
Daiwa Securities Group Corporate Principles (adopted March 1998)
5. Managing C
SR
Sustainab
le comp
any (objective)
Sustainab
le society (objective)
Changing the aw
areness and behavior of stakeholders
Daiwa Securities Group CSR and Material Issues
MaterialIssuesReport
-
The Daiwa Securities Group and Sustainability
Modern society faces many issues having an impact on sus-
tainability. These include, on a global scale, global warming
and other environmental problems that threaten humankind’s
survival, growing disparities in prosperity, and in Japan, a
rapidly aging population and a declining birthrate. There is
no way to solve these problems without responsible action
on the part of every sector of society—government, the pri-
vate sector, and citizens.
Enterprises are key players because they have the pow-
er to influence the creation of a sustainable society, and fi-
nancial institutions can fulfill their social missions through
their main business of finance. At the Daiwa Securities Group,
we believe that in addition to contributing to the develop-
ment and growth of fair and sound financial markets, our
role is to promote the flow of capital to create a sustainable
society by incorporating a social perspective into finance.
In accordance with this belief, we have joined the United
Nations Environment Programme Finance Initiative (UNEP FI)∗1
and signed the Principles for Responsible Investment (PRI)∗2
and the Carbon Disclosure Project (CDP),∗3 to do our part
as a member of the international community.
7 8DAIWA SUSTAINABIL ITY REPORT 2008
Approaches for Creating a Sustainable Society1. Serving society through our businessSecurities companies provide a public benefit by acting as intermediaries between parties needing financing and investors looking to invest, thus supporting Japan’s transition from a savings-oriented society to one more attuned to investing.
The Daiwa Securities Group carries out its operations in full legal compliance and meets social expectations in day-to-day operations to ensure the sound functioning of the se-curities market. 2. Implementing a business strategy that takes society
and the environment into accountBy incorporating a social perspective into finance, the Group strives to practice the corporate social responsibility expec-ted of a financial institution. We do this through SRI funds, World CO2L bonds∗1 and vaccine bonds,∗2 which give ordi-nary investors an opportunity to participate in tackling social and environmental issues through investing. 3. Promoting CSR outside the companyThrough the UNEP FI, PRI and CDP, the Group lends sup-port to various stakeholders, including the financial industry, to encourage CSR activities.
4. Carrying out corporate citizenshipThe Group is active in nurturing the next generation of eco-nomics and finance professionals, encouraging education in these fields as part of our Medium-term Management Plan. We will also continue providing long-term support for local communities and international society through financial mechanisms relating to our core business via the grant ac-tivities of foundations and NPOs/NGOs. 5. Managing CSRThe Group will continue doing business with awareness of its social and environmental impact. Along with instituting stronger corporate governance, achieving full compliance, attaining consumer satisfaction, and improving the workplace environment, we will strive to build an environmental man-agement system and raise environmental awareness among employees. We are currently endeavoring to reduce the use of paper, a major environmental load generated by our busi-ness.
∗1 United Nations Environment Programme Finance Initiative (UNEP FI)
∗2 Principles for Responsible Investment (PRI)∗3 Carbon Disclosure Project (CDP)
∗1 World CO2L (Cool) Bonds: See p. 14 for more details.∗2 Vaccine bonds: See p. 12 for more details.
TermsWeb
Customer trustWe stand on the trust of our customers. Prudently putting customer interests first and achieving a high standard of professional competence, we intend to become Japan’s premier securities group at home and abroad.
Total complianceWe can be proud and prosper only when we achieve total compliance and gain the trust of our customers, markets and the whole of society. We will contribute to society by maintaining high standards of professional ethics and a fair code of conduct.
Human resourcesOur competence is built on our human resources. We value the creativity of each individual, we will nurture a corporate culture where people are not afraid of challenges, and we will evaluate their capabilities and contributions fairly.
Sound profitOur fundamental objective is to enhance shareholder value through sound business operations. We will offer valuable services to our customers and earn appropriate profits for distribution to our shareholders.
Daiwa Securities Group: Approaches for Creating a Sustainable Society
1. Serving society through our business
2. Implementing a business strategy that takes society and the environment into account
3. Promoting CSR outside the company
4. Carrying out corporate citizenship
CSR activities (measures)
Daiwa Securities Group Corporate Principles (adopted March 1998)
5. Managing C
SR
Sustainab
le comp
any (objective)
Sustainab
le society (objective)
Changing the aw
areness and behavior of stakeholders
Daiwa Securities Group CSR and Material Issues
MaterialIssuesReport
-
9 10DAIWA SUSTAINABIL ITY REPORT 2008
Daiwa Securities Group StakeholdersThe Daiwa Securities Group has identified certain issues as material issues having a major impact on decision-making by stakeholders. After a selection process on the basis of input from stakeholders, for example, executive and employ-ee surveys, customer satisfaction surveys, shareholder sur-veys, opinions from outside experts, and requests from NPOs and other organizations in and outside Japan, four material issues were examined in depth from four viewpoints shown on the right.
Material Issues for the Daiwa Securities Group
Daiwa Securities Group CSR and Material IssuesMaterial
IssuesReport
DaiwaSecurities
Group
DaiwaSecurities
Group
SecuritiesMarket
Issuers
BusinessPartners
Government
NPOs/NGOsLocalCommunities
Employees
Shareholders
Investors
Securities MarketWe collaborate with all par-ties involved in the securities market and aim for the de-velopment of a sound and reliable securities market.
IssuersPrivate-sector enterprises, public corporations, and other entities that need funds by is-suing stocks and bonds are valuable customers of the Daiwa Securities Group.
Business PartnersWe maintain fair relationships with all our business partners and work together to create a sustainable society.
ShareholdersTo earn the confidence of our shareholders, we aim to pro-vide fully transparent informa-tion disclosure, and meet their expectations by contin-ually creating value.
GovernmentWe fulfill our tax obligations and offer policy suggestions to create a better society.
EmployeesWe are endeavoring to cre-ate a workplace where our employees, who create ad-ded value for all other stake-holders, are fully motivated and can find satisfaction in their work and lives. Our em-ployees’ families are also im-portant stakeholders.
InvestorsWe are committed to offering products and services that meet the needs of individual investors, institutional invest-ors, and potential investors who are considering invest-ing in the future, and to im-proving customer satisfac-tion.
NPOs/NGOsWe collaborate with NPOs and NGOs in such fields as financial and economic edu-cation and disaster relief. We reflect social values in our management through active dialogue.
Local CommunitiesAs members of their local communities, our branches and overseas offices pro-mote community-based ef-forts.
Em
ployees’ Familie
s
Definition of material issues
¡Issues with significant impact on society and on decision-making by stakeholders
¡Issues with which many Daiwa Securities Group executives and employees are involved in through the Group’s business
¡Issues related to contributing to the sustainability of financial institutions expected by society
¡Issues related to fulfilling corporate citizenship responsibilities and which contribute Group executives and employees to find satisfaction in their work and lives.
To contribute to creating a sustainable society through its core securities business, the Daiwa Securities Group incorporates a social perspec-tive into investment. Through SRI funds, devel-opment and sale of financial products supporting socially meaningful activities, procuring funds for enterprises with environmental technologies or other social value, providing CSR-related investment information, and through emissions trading, we promote the flow of financial resources toward finding solutions for social issues and creating a sustainable society.
Material Issue 1Adding a Social Perspective to Investment
We will try to reduce the environmental impact of our business as much as possible by using information technology to streamline operations, cut down on the volume of paper we use, and other measures. We also remain committed to collaborating in and promoting efforts to solve environmental problems, including conservation of biodiversity.
Material Issue 2Commitment to the Development of a Sound Securities MarketAs companies in the securities industry, we will fulfill our responsibility to ensure the development of a sound, reliable securities market through compliance that lives up to our customers’ and society’s expectations and that does not stop at mere statutory compliance; strong ethical princi-ples; and rejection of unlawful transactions and influence by criminal elements.
Material Issue 3Contribution toGlobal Environment
Material Issue 4Communicating Information for a Sustainable SocietyWe will continue our communication activities, building on our expertise in handling information through education about finance and economics and industry-academia collaboration in research and development, and by offering the most up-to-date information on sustainability.
As one of our key management policies, we also focus on initiatives to create a company that affords executives and employees satisfaction in their work and lives, and a chance to use their talents to the full. More information on this topic can be found in the “Message from the President” (pp. 5–6) and in the “Respect for People and Human Re-source Utilization” section (pp. 37–42)
-
9 10DAIWA SUSTAINABIL ITY REPORT 2008
Daiwa Securities Group StakeholdersThe Daiwa Securities Group has identified certain issues as material issues having a major impact on decision-making by stakeholders. After a selection process on the basis of input from stakeholders, for example, executive and employ-ee surveys, customer satisfaction surveys, shareholder sur-veys, opinions from outside experts, and requests from NPOs and other organizations in and outside Japan, four material issues were examined in depth from four viewpoints shown on the right.
Material Issues for the Daiwa Securities Group
Daiwa Securities Group CSR and Material IssuesMaterial
IssuesReport
DaiwaSecurities
Group
DaiwaSecurities
Group
SecuritiesMarket
Issuers
BusinessPartners
Government
NPOs/NGOsLocalCommunities
Employees
Shareholders
Investors
Securities MarketWe collaborate with all par-ties involved in the securities market and aim for the de-velopment of a sound and reliable securities market.
IssuersPrivate-sector enterprises, public corporations, and other entities that need funds by is-suing stocks and bonds are valuable customers of the Daiwa Securities Group.
Business PartnersWe maintain fair relationships with all our business partners and work together to create a sustainable society.
ShareholdersTo earn the confidence of our shareholders, we aim to pro-vide fully transparent informa-tion disclosure, and meet their expectations by contin-ually creating value.
GovernmentWe fulfill our tax obligations and offer policy suggestions to create a better society.
EmployeesWe are endeavoring to cre-ate a workplace where our employees, who create ad-ded value for all other stake-holders, are fully motivated and can find satisfaction in their work and lives. Our em-ployees’ families are also im-portant stakeholders.
InvestorsWe are committed to offering products and services that meet the needs of individual investors, institutional invest-ors, and potential investors who are considering invest-ing in the future, and to im-proving customer satisfac-tion.
NPOs/NGOsWe collaborate with NPOs and NGOs in such fields as financial and economic edu-cation and disaster relief. We reflect social values in our management through active dialogue.
Local CommunitiesAs members of their local communities, our branches and overseas offices pro-mote community-based ef-forts.
Em
ployees’ Familie
s
Definition of material issues
¡Issues with significant impact on society and on decision-making by stakeholders
¡Issues with which many Daiwa Securities Group executives and employees are involved in through the Group’s business
¡Issues related to contributing to the sustainability of financial institutions expected by society
¡Issues related to fulfilling corporate citizenship responsibilities and which contribute Group executives and employees to find satisfaction in their work and lives.
To contribute to creating a sustainable society through its core securities business, the Daiwa Securities Group incorporates a social perspec-tive into investment. Through SRI funds, devel-opment and sale of financial products supporting socially meaningful activities, procuring funds for enterprises with environmental technologies or other social value, providing CSR-related investment information, and through emissions trading, we promote the flow of financial resources toward finding solutions for social issues and creating a sustainable society.
Material Issue 1Adding a Social Perspective to Investment
We will try to reduce the environmental impact of our business as much as possible by using information technology to streamline operations, cut down on the volume of paper we use, and other measures. We also remain committed to collaborating in and promoting efforts to solve environmental problems, including conservation of biodiversity.
Material Issue 2Commitment to the Development of a Sound Securities MarketAs companies in the securities industry, we will fulfill our responsibility to ensure the development of a sound, reliable securities market through compliance that lives up to our customers’ and society’s expectations and that does not stop at mere statutory compliance; strong ethical princi-ples; and rejection of unlawful transactions and influence by criminal elements.
Material Issue 3Contribution toGlobal Environment
Material Issue 4Communicating Information for a Sustainable SocietyWe will continue our communication activities, building on our expertise in handling information through education about finance and economics and industry-academia collaboration in research and development, and by offering the most up-to-date information on sustainability.
As one of our key management policies, we also focus on initiatives to create a company that affords executives and employees satisfaction in their work and lives, and a chance to use their talents to the full. More information on this topic can be found in the “Message from the President” (pp. 5–6) and in the “Respect for People and Human Re-source Utilization” section (pp. 37–42)
-
The Daiwa Securities Group, through its core securities business, helps promote solutions to global problems such as poverty or the environment by adding a social perspective to invest-ment.
We have taken the initiative to add a social perspective to investment. As set out in the United Nations undertakings UNEP FI∗2 and PRI,∗3 this is also the role that the internation-al community expects financial institutions to play toward creating a sustainable society. Specific examples of the Group’s activities in this area are described on the right.
Raising awareness of socially responsible investment is one contribution that the Group can make to create a sus-tainable society. The Group considers promoting socially re-sponsible investment a material CSR issue.
11 12DAIWA SUSTAINABIL ITY REPORT 2008
Sales of Vaccine Bonds The Russell Global Environment Technology Fund
Retail and Wholesale Business Initiatives
Ad
din
g a So
cial Perspective to
Investm
ent
Material Issue 1
In March 2008, the Daiwa Securities Group sold approxi-mately 22 billion yen worth of vaccine bonds (South Africa rand denominated).
Every year, between two and three million children in de-veloping countries around the world die from preventable in-fectious diseases. To address this problem, the Global Alli-ance for Vaccines and Immunisation (GAVI), a global private sector partnership carrying out vaccination programs, was formed, and vaccine bonds were issued by the International Finance Facility for Immunisation (IFFIm), the financial facility for GAVI. Using funds raised by vaccine bonds, GAVI pro-vides free health care and vaccinations in 70 developing countries. The vaccine bonds are redeemed using funds donated by the governments of eight (as of May 2008) do-nor countries. The sale of vaccine bonds helped investors learn about the activities of these international bodies and raised funds to support their activities. The Daiwa Securities Group will continue playing an active role in developing and selling financial products that can help remedy other prob-lems in the world.
In July 2007, the Daiwa Securities Group acted as the lead manager for listing China Boqi Environmental Solutions Technology (Holding) Co., Ltd. (China Boqi) on the first sec-tion of the Tokyo Stock Exchange. China Boqi is the leading company in flue gas desulfurization projects and is making a major contribution to reducing sulfur oxide (SOx), nitrogen oxide (NOx) and other emissions from the continually grow-ing number of coal-fired power generation plants in China.
Thanks to the strong support of numerous investors in China Boqi, we were able to participate in raising capital to help the company expand its environmental protection solu-tions business. Through our investment banking business, we will continue to act as an intermediary to finance projects that contribute to the global environment.
Support for Listing China Boqi on the First Section of the Tokyo Stock Exchange
In April 2008, the Daiwa Securities Group began selling the Russell Global Environment Technology Fund, which invests in companies providing environmental technologies and ser-vices.
This fund, following Russell Global Environment Technol-ogy Fund standards, invests in shares in companies in and outside Japan whose main business, such as clean energy or waste disposal, contributes to improving the global envir-onment. Companies in which this fund invests include Ves-tas Wind Systems A/S (Denmark), which develops, sells and operates wind power generation systems, Veolia Water (France), which is involved in water purification and other water servi-ces, and other companies with su-perior technologies.
This fund is jointly managed by several fund management compa-nies carefully selected by Russell Investments, the world’s largest management rating company. The managers of the fund include Gen-eration Investment Management LLP, a company founded by former U.S. vice president Al Gore.
∗2 United Nations Environment Programme FinanceInitiative (UNEP FI)
∗3 Principles for Responsible Investment (PRI)
Masaaki GotoCorporate Executive OfficerDaiwa Securities Group Inc.
Stakeholder Comment
Thank You for Your Support of Vaccine BondsIFFIm’s goal is to accelerate the availability of funds for the GAVI Alliance’s immunisation programs in 70 of the poorest countries around the world. From 2006 to 2015, we expect that the funds raised by IFFIm bonds could im-munise an additional 500 million people, and strengthen the health and immunization services in these countries. IFFIm’s first Uridashi bond was a great success, and we thank Daiwa Securities for their hard work and Japanese in-vestors for their investment in the first “Vaccine Bonds”. We look forward to working together with Japanese investors again in future.
TermsWeb
Russell Global Environment Technology Fund prospectus
Development and Sale of SRI Financial ProductsThe Daiwa Securities Group develops and sells financial products to support projects addressing international is-sues, such as vaccine bonds, and other financial prod-ucts to support enterprises actively engaged in CSR through the securities market, such as SRI funds.
Financing for Enterprises with Environmental Technologies or Other Social Value We support financing for companies with environmental technologies or companies engaged in socially signifi-cant activities.
SRI Education, CSR-related InformationWe will encourage investors to make investment deci-sions taking into consideration CSR activities, and pro-vide useful information for investors wishing to invest in companies operating responsibly toward society.
Involvement in Emissions TradingWe will contribute to activating market mechanisms to give depth to the emissions trading market and by doing so indirectly support the operation of mechanisms to off-set global warming.
Issues and Targets for Fiscal 2007 Performance/Progress Achieved in Fiscal 2007
¡Promote the widespread pract ice o f SRI .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
¡Provide more information on social ly responsible invest-ment.
¡Sold vaccine bonds, the Russell Global Environmental Technology Fund, and the Daiwa Eco Fund; conducted SRI education at symposiums such as the Eco-Products Exhibition.
-----------------------------------------------------
¡ I ssued Env i ronment , Emerg ing Economies, New Tech-no log ies , an investment in format ion repor t on the en-v i ronment , emerg ing markets and new techno log ies ; expanded the research capab i l i t ies o f the Da iwa Inst i-tu te o f Research Ltd. ; communicated in format ion on emiss ions t rad ing, and ar ranged IR seminars focus ing on the CSR act iv i t ies o f l i s ted compan ies.
∗1 Socially Responsible Investment (SRI) is an approach to investing in enterprises that considers not only financial performance and profit levels but also CSR perfor-mance such as environmental or social undertakings, ethical practices and so on. In addition to investment in SRI funds, SRI includes stock investment taking into account the target company’s CSR performance, and investments that evaluate the social utility of capital use.
Chairman of the Board of Directors International Finance Facility for Immunisation
Alan Gillespie
Adding a Social Perspective to Investment
Adding a Social Perspective to InvestmentBy providing financial products to remedy social problems, raising awareness of socially re-sponsible investment (SRI),∗1 offering CSR-related investment information, and conducting emissions trading, we want to create a better society through the securities industry.
1Material Issue
-
The Daiwa Securities Group, through its core securities business, helps promote solutions to global problems such as poverty or the environment by adding a social perspective to invest-ment.
We have taken the initiative to add a social perspective to investment. As set out in the United Nations undertakings UNEP FI∗2 and PRI,∗3 this is also the role that the internation-al community expects financial institutions to play toward creating a sustainable society. Specific examples of the Group’s activities in this area are described on the right.
Raising awareness of socially responsible investment is one contribution that the Group can make to create a sus-tainable society. The Group considers promoting socially re-sponsible investment a material CSR issue.
11 12DAIWA SUSTAINABIL ITY REPORT 2008
Sales of Vaccine Bonds The Russell Global Environment Technology Fund
Retail and Wholesale Business Initiatives
Ad
din
g a So
cial Perspective to
Investm
ent
Material Issue 1
In March 2008, the Daiwa Securities Group sold approxi-mately 22 billion yen worth of vaccine bonds (South Africa rand denominated).
Every year, between two and three million children in de-veloping countries around the world die from preventable in-fectious diseases. To address this problem, the Global Alli-ance for Vaccines and Immunisation (GAVI), a global private sector partnership carrying out vaccination programs, was formed, and vaccine bonds were issued by the International Finance Facility for Immunisation (IFFIm), the financial facility for GAVI. Using funds raised by vaccine bonds, GAVI pro-vides free health care and vaccinations in 70 developing countries. The vaccine bonds are redeemed using funds donated by the governments of eight (as of May 2008) do-nor countries. The sale of vaccine bonds helped investors learn about the activities of these international bodies and raised funds to support their activities. The Daiwa Securities Group will continue playing an active role in developing and selling financial products that can help remedy other prob-lems in the world.
In July 2007, the Daiwa Securities Group acted as the lead manager for listing China Boqi Environmental Solutions Technology (Holding) Co., Ltd. (China Boqi) on the first sec-tion of the Tokyo Stock Exchange. China Boqi is the leading company in flue gas desulfurization projects and is making a major contribution to reducing sulfur oxide (SOx), nitrogen oxide (NOx) and other emissions from the continually grow-ing number of coal-fired power generation plants in China.
Thanks to the strong support of numerous investors in China Boqi, we were able to participate in raising capital to help the company expand its environmental protection solu-tions business. Through our investment banking business, we will continue to act as an intermediary to finance projects that contribute to the global environment.
Support for Listing China Boqi on the First Section of the Tokyo Stock Exchange
In April 2008, the Daiwa Securities Group began selling the Russell Global Environment Technology Fund, which invests in companies providing environmental technologies and ser-vices.
This fund, following Russell Global Environment Technol-ogy Fund standards, invests in shares in companies in and outside Japan whose main business, such as clean energy or waste disposal, contributes to improving the global envir-onment. Companies in which this fund invests include Ves-tas Wind Systems A/S (Denmark), which develops, sells and operates wind power generation systems, Veolia Water (France), which is involved in water purification and other water servi-ces, and other companies with su-perior technologies.
This fund is jointly managed by several fund management compa-nies carefully selected by Russell Investments, the world’s largest management rating company. The managers of the fund include Gen-eration Investment Management LLP, a company founded by former U.S. vice president Al Gore.
∗2 United Nations Environment Programme FinanceInitiative (UNEP FI)
∗3 Principles for Responsible Investment (PRI)
Masaaki GotoCorporate Executive OfficerDaiwa Securities Group Inc.
Stakeholder Comment
Thank You for Your Support of Vaccine BondsIFFIm’s goal is to accelerate the availability of funds for the GAVI Alliance’s immunisation programs in 70 of the poorest countries around the world. From 2006 to 2015, we expect that the funds raised by IFFIm bonds could im-munise an additional 500 million people, and strengthen the health and immunization services in these countries. IFFIm’s first Uridashi bond was a great success, and we thank Daiwa Securities for their hard work and Japanese in-vestors for their investment in the first “Vaccine Bonds”. We look forward to working together with Japanese investors again in future.
TermsWeb
Russell Global Environment Technology Fund prospectus
Development and Sale of SRI Financial ProductsThe Daiwa Securities Group develops and sells financial products to support projects addressing international is-sues, such as vaccine bonds, and other financial prod-ucts to support enterprises actively engaged in CSR through the securities market, such as SRI funds.
Financing for Enterprises with Environmental Technologies or Other Social Value We support financing for companies with environmental technologies or companies engaged in socially signifi-cant activities.
SRI Education, CSR-related InformationWe will encourage investors to make investment deci-sions taking into consideration CSR activities, and pro-vide useful information for investors wishing to invest in companies operating responsibly toward society.
Involvement in Emissions TradingWe will contribute to activating market mechanisms to give depth to the emissions trading market and by doing so indirectly support the operation of mechanisms to off-set global warming.
Issues and Targets for Fiscal 2007 Performance/Progress Achieved in Fiscal 2007
¡Promote the widespread pract ice o f SRI .
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¡Provide more information on social ly responsible invest-ment.
¡Sold vaccine bonds, the Russell Global Environmental Technology Fund, and the Daiwa Eco Fund; conducted SRI education at symposiums such as the Eco-Products Exhibition.
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¡ I ssued Env i ronment , Emerg ing Economies, New Tech-no log ies , an investment in format ion repor t on the en-v i ronment , emerg ing markets and new techno log ies ; expanded the research capab i l i t ies o f the Da iwa Inst i-tu te o f Research Ltd. ; communicated in format ion on emiss ions t rad ing, and ar ranged IR seminars focus ing on the CSR act iv i t ies o f l i s ted compan ies.
∗1 Socially Responsible Investment (SRI) is an approach to investing in enterprises that considers not only financial performance and profit levels but also CSR perfor-mance such as environmental or social undertakings, ethical practices and so on. In addition to investment in SRI funds, SRI includes stock investment taking into account the target company’s CSR performance, and investments that evaluate the social utility of capital use.
Chairman of the Board of Directors International Finance Facility for Immunisation
Alan Gillespie
Adding a Social Perspective to Investment
Adding a Social Perspective to InvestmentBy providing financial products to remedy social problems, raising awareness of socially re-sponsible investment (SRI),∗1 offering CSR-related investment information, and conducting emissions trading, we want to create a better society through the securities industry.
1Material Issue
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13 14DAIWA SUSTAINABIL ITY REPORT 2008
In Our Asset Management Business
In Our Research and Systems Business
The most representative SRI fund∗ managed by the Daiwa Asset Management Co. Ltd. is the Daiwa SRI Fund (set up May 2004), which invests with a focus on CSR, and the Daiwa Eco Fund (set up March 2006), which takes into con-sideration environment-related activities and how sharehold-er capital is used. As of March 31, 2008, the Daiwa SRI Fund and the Daiwa Eco Fund had assets of 6.2 billion yen and 38.8 billion yen, respectively.
In fiscal 2007, we began managing two environment-ori-ented SRI funds—the Global Environment Foreign Bond Bal-ance Fund and the Global Environment Equity Fund, which are sold mainly through Japanese regional banks. We will continue to provide timely information to and actively com-municate with investors and financial institution staff selling investment trusts, to promote SRI funds as an accessible fi-nancial product.
In Our Emissions Trading Business
Sale of World CO2L Bond Developed Jointly with the World Bank
In June 2008, we launched sales of the Certified Emission Reduction (CER) Linked USD Denominated Uridashi Bond (World CO2L [Cool] Bond).
The World CO2L Bond is a US dollar-denominated bond that pays interest to investors calculated according to emis-sions-reduction performance of specific greenhouse gas reduction projects and emissions credit prices. Emissions
credits are bought from hydro power generating businesses in China, which are then sold on the market before payment of bond interest. Transparency regarding the interest paid to investors is ensured as the interest is calculated according to a disclosed formula. This bond has the advantage of of-fering individual investors, who cannot usually participate di-rectly in emissions trading, a chance to do so indirectly. It is also expected to provide a steady source of profits for greenhouse gas reduction projects.
∗ SRI funds: investment trusts designed for socially responsible investment.
The Daiwa Securities Group will continue to develop financial
products with a social perspective, help finance companies
with social value, and actively pursue the emissions trading
business. We will also further expand communication of cor-
porate environment and CSR information to investors and en-
deavor to promote SRI.
Fiscal 2008 Targets and Action Plans
Management of SRI Funds
In February 2008, Daiwa Institute of Research Ltd. and Daiwa Securities SMBC Co. Ltd. were joint sponsors of the 5th Strategic Management Laboratory seminar on the theme of creating a low-carbon society. The seminar, attended by 240 participants, was titled “Eco-innovation: What Industry Needs to Do on Global Warming Issues and Creating a Low-carbon Society.”
At the seminar, Professor Ryoichi Yamamoto, the Univer-sity of Tokyo’s Institute of Industrial Science, lectured on what can be done to alleviate global warming. The lecture was followed by a panel discussion on the effects of climate change issues and what enterprises are doing for the envir-onment. Participants found the seminar thought-provoking, with one person saying that “the discussions helped renew my awareness of global warming issues and made clear the need for a long-term approach to solving the problems.”
Environment Seminars for Corporate Clients
Communicating CSR-related Investment Information
Because we want to help take measures against global warming through our business, we are involved in the emissions trading business through self-investment.
Trading in emissions credits is a useful means for preventing global warming. The emissions credit market encourages the global economy to shift to a sus-tainable economy that takes environmental worth into consideration. A price is assigned to greenhouse gas emissions costs, and incentives to reduce those costs lead to reducing global warming. Our role is to create and nurture an emis-sions credit market and make the market mechanism work, and also to help raise financing for business ventures that reduces greenhouse gas emissions.
Investing in emissions trading is a business that starts with identifying pro-jects that reduce greenhouse gases. The business takes a long time to devel-op and does not yield immediate profits, but I believe that involvement in pro-jects to preserve the environment for future generations is very worthwhile. Another consideration is that using our financial know-how to stop global warming helps us meet our social responsibility as a financial institution. With the coop-eration of companies in the Daiwa Securities Group, we are making steady pro-gress in creating finance for the future.
What the Daiwa Securities Group is Doing
Strategic Management Seminar
The Daiwa Securities Group employs various formats to communicate information allowing investors to make invest-ment decisions from different viewpoints, such as environ-mental, social or governance considerations, as well as from the CSR perspective.
At Daiwa Institute of Research Ltd., the Management Strategy Research Department conducts research and communicates information concerning CSR and management. The Investment Strategy Department has analysts specializ-ing in the environment, who draw up investment strategies centering mainly in this field and disseminate information through reports or seminars.
In April 2008, the Investment Strategy & Research De-partment of Daiwa Securities Co. Ltd. published an invest-ment report titled Environment, Emerging Economies, New Technologies which many investors found very useful.
Meanwhile, Daiwa Investor Relations Co. Ltd. arranges seminars on CSR by listed companies for individual invest-ors. In December 2007, two listed companies held CSR briefings. In March 2008, the company arranged a joint briefing by five listed compa-nies whose heads took part in a discussion on CSR; this briefing attracted 810 individual investor participants.
We will continue actively approaching companies in these ways, to enable us to provide data on market trends and information meeting in-vestors’ needs. Environment, Emerging Economies,
New Technologies investment report
See pp. 15–16 for more details on the Daiwa Securities Group’s emissions trading business.
Toshihiko OnishiDeputy PresidentDaiwa Securities SMBC Principal Investments Co. Ltd.
1Material Issue
Adding a Social Perspective to Investment
Ad
din
g a So
cial Perspective to
Investm
ent
Material Issue 1
-
13 14DAIWA SUSTAINABIL ITY REPORT 2008
In Our Asset Management Business
In Our Research and Systems Business
The most representative SRI fund∗ managed by the Daiwa Asset Management Co. Ltd. is the Daiwa SRI Fund (set up May 2004), which invests with a focus on CSR, and the Daiwa Eco Fund (set up March 2006), which takes into con-sideration environment-related activities and how sharehold-er capital is used. As of March 31, 2008, the Daiwa SRI Fund and the Daiwa Eco Fund had assets of 6.2 billion yen and 38.8 billion yen, respectively.
In fiscal 2007, we began managing two environment-ori-ented SRI funds—the Global Environment Foreign Bond Bal-ance Fund and the Global Environment Equity Fund, which are sold mainly through Japanese regional banks. We will continue to provide timely information to and actively com-municate with investors and financial institution staff selling investment trusts, to promote SRI funds as an accessible fi-nancial product.
In Our Emissions Trading Business
Sale of World CO2L Bond Developed Jointly with the World Bank
In June 2008, we launched sales of the Certified Emission Reduction (CER) Linked USD Denominated Uridashi Bond (World CO2L [Cool] Bond).
The World CO2L Bond is a US dollar-denominated bond that pays interest to investors calculated according to emis-sions-reduction performance of specific greenhouse gas reduction projects and emissions credit prices. Emissions
credits are bought from hydro power generating businesses in China, which are then sold on the market before payment of bond interest. Transparency regarding the interest paid to investors is ensured as the interest is calculated according to a disclosed formula. This bond has the advantage of of-fering individual investors, who cannot usually participate di-rectly in emissions trading, a chance to do so indirectly. It is also expected to provide a steady source of profits for greenhouse gas reduction projects.
∗ SRI funds: investment trusts designed for socially responsible investment.
The Daiwa Securities Group will continue to develop financial
products with a social perspective, help finance companies
with social value, and actively pursue the emissions trading
business. We will also further expand communication of cor-
porate environment and CSR information to investors and en-
deavor to promote SRI.
Fiscal 2008 Targets and Action Plans
Management of SRI Funds
In February 2008, Daiwa Institute of Research Ltd. and Daiwa Securities SMBC Co. Ltd. were joint sponsors of the 5th Strategic Management Laboratory seminar on the theme of creating a low-carbon society. The seminar, attended by 240 participants, was titled “Eco-innovation: What Industry Needs to Do on Global Warming Issues and Creating a Low-carbon Society.”
At the seminar, Professor Ryoichi Yamamoto, the Univer-sity of Tokyo’s Institute of Industrial Science, lectured on what can be done to alleviate global warming. The lecture was followed by a panel discussion on the effects of climate change issues and what enterprises are doing for the envir-onment. Participants found the seminar thought-provoking, with one person saying that “the discussions helped renew my awareness of global warming issues and made clear the need for a long-term approach to solving the problems.”
Environment Seminars for Corporate Clients
Communicating CSR-related Investment Information
Because we want to help take measures against global warming through our business, we are involved in the emissions trading business through self-investment.
Trading in emissions credits is a useful means for preventing global warming. The emissions credit market encourages the global economy to shift to a sus-tainable economy that takes environmental worth into consideration. A price is assigned to greenhouse gas emissions costs, and incentives to reduce those costs lead to reducing global warming. Our role is to create and nurture an emis-sions credit market and make the market mechanism work, and also to help raise financing for business ventures that reduces greenhouse gas emissions.
Investing in emissions trading is a business that starts with iden
